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| +Joel Backaler |
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| +Joel Backaler |
The answer to this question varies depending on whether an American firm is considering new ownership, seeking new partners or responding to new competitors from China.
For American companies seeking strategic investment, Chinese ownership presents an alternative to the traditional routes of private equity investment or acquisition by a larger domestic industry incumbent. The identity of the ultimate decision-maker is a top concern among firms taking on private-equity investment. Under private-equity investment, the CEO has to answer to the representative assigned by the private-equity firm. Chinese ownership can remove this concern from the equation.
For American firms partnering with Chinese companies, access to new international markets is an obvious gain. In theory, this sounds like an ideal relationship: The American partner possesses a world-class brand, while the Chinese partner brings capital and new market access. But what are the broader implications for industry standards? Western companies should consider the long-term implications of partnering with Chinese firms, in particular the issues of intellectual property and technology transfer.
Finally, a common misconception about Chinese investment in America is that the corrupt business practices that may be present in the Chinese firm’s domestic operations will simply carry over to the US This assumption is false. When a Chinese company operates in the US, it must do so in accordance with local regulations—or else face the legal consequences.More in the Business Monitor.
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| +Joel Backaler |
China Goes West is a primer for business leaders and consumers alike on how to work with Chinese firms, understand cultural differences and prepare for the future. It is full of compelling anecdotes about Chinese companies that have successfully invested in faltering American businesses and saved American jobs, and explores why others have failed. It answers tough questions about national security and regulatory concerns, and offers advice for businesses on both sides of the equation.
